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US-Japan price gap points to stronger yen

Japanese currency cheapest among major countries, say analysts

President Donald Trump has complained that an overvalued dollar puts the U.S. at a disadvantage in international trade.   © Reuters

TOKYO -- With the gap in inflation between the U.S. and Japan widening, a growing chorus of foreign exchange market participants is pointing to the possibility of a significant rise in the value of the yen over the medium to long term.

Changes in consumer prices in the two countries reveal a surprising disparity: Over the past 20 years, the gap has widened by more than 50%. While prices in the U.S. continue to rise, those in Japan remain almost flat, the country having gone through a long bout of deflation.

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